Hawkins (NASDAQ: HWKN) and Dow Chemical (NYSE:DOW) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Dividends

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Hawkins pays an annual dividend of $0.88 per share and has a dividend yield of 2.5%. Dow Chemical pays an annual dividend of $1.84 per share and has a dividend yield of 2.8%. Hawkins pays out 28.9% of its earnings in the form of a dividend. Dow Chemical pays out 77.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Hawkins has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Dow Chemical has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Hawkins and Dow Chemical, as provided by MarketBeat.com.

Hawkins has higher revenue and earnings than Dow Chemical. Hawkins is trading at a lower price-to-earnings ratio than Dow Chemical, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

58.7% of Hawkins shares are owned by institutional investors. Comparatively, 67.8% of Dow Chemical shares are owned by institutional investors. 3.7% of Hawkins shares are owned by insiders. Comparatively, 0.9% of Dow Chemical shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Hawkins and Dow Chemical’s net margins, return on equity and return on assets.

Net Margins

Return on Equity

Return on Assets

Hawkins

6.53%

7.94%

4.22%

Dow Chemical

5.90%

10.92%

3.89%

Summary

Dow Chemical beats Hawkins on 7 of the 13 factors compared between the two stocks.

Hawkins Company Profile

Hawkins, Inc. distributes, blends and manufactures chemicals and specialty ingredients for its customers in a range of industries. The Company conducts its business in three segments: Industrial, Water Treatment, and Health and Nutrition. Its Industrial segment is engaged in providing industrial chemicals, products and services to various industries, such as agriculture, chemical processing, electronics and energy. Its Water Treatment segment is engaged in providing chemicals, equipment and solutions for potable water, municipal and industrial wastewater, industrial process water and non-residential swimming pool water. The Health and Nutrition segment is engaged in providing ingredient distribution, processing and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, and health and wellness products.